03/25/1999 01:35 PM Senate L&C

           SB 93-NAMES OF ORGANIZATIONS & BUSINESSES                                                                            
                                                                                                                                
CHAIRMAN MACKIE announced SB 93 to be up for consideration.                                                                     
                                                                                                                                
MR. TERRY ELDER, Director, Division of Banking, Securities and                                                                  
Corporations, said Ms. Dawn Williams knew more than he did about                                                                
the issue, but she has a bronchial infection and has a hard time                                                                
talking.                                                                                                                        
                                                                                                                                
MR. ELDER said there are currently three different sections for                                                                 
approving a name.  An older standard is that you can't have a name                                                              
that is deceptively the same as or similar to another name.                                                                     
Another standard is that the name must be distinct and the new                                                                  
sections say that the name must be distinguishable on the records                                                               
of the agency which involves the corporation section of his                                                                     
Division.  The newer sections that cover limited liability                                                                      
companies and limited liability partnerships have the newer                                                                     
standards, but the others have the old standards.  This legislation                                                             
consolidates all to the newer standard.                                                                                         
                                                                                                                                
SENATOR DONLEY moved to adopt the committee substitute to SB 93.                                                                
There were no objections and it was so ordered.                                                                                 
                                                                                                                                
MR. ELDER said that the name issue recently has put the State in                                                                
the middle of disputes and that really isn't a public protection                                                                
issue.                                                                                                                          
                                                                                                                                
CHAIRMAN MACKIE asked if he knew of anyone opposed to this bill.                                                                
                                                                                                                                
MR. ELDER said he just didn't have an idea.  He said the Division                                                               
does not have the authority to tell someone they can or cannot use                                                              
a name.  The dispute is usually whether they have made a mistake by                                                             
issuing it.  A lot of people think the Division has more authority                                                              
than they really have to enforce a name, but it is a private                                                                    
action.                                                                                                                         
                                                                                                                                
CHAIRMAN MAKCIE asked if SB 93 clarifies the language making it                                                                 
easier to understand what the Division can and cannot do in terms                                                               
of issuing a new name.                                                                                                          
                                                                                                                                
MR. ELDER affirmed that and added that it makes it consistent in                                                                
statute.                                                                                                                        
                                                                                                                                
Number 525                                                                                                                      
                                                                                                                                
SENATOR LEMAN said he worked with a group that was incorporated as                                                              
a nonprofit entity and the name was very similar to one that was                                                                
already incorporated.  They got a letter of nonobjection from the                                                               
other group.  Could that type of activity continue, he asked.                                                                   
                                                                                                                                
MR. ELDER answered that is the current procedure, but they should                                                               
greatly reduce those types of problems by moving to distinguishable                                                             
on the records.                                                                                                                 
                                                                                                                                
SENATOR LEMAN said a memo from Legal Services noted there were                                                                  
religious organizations with similar names, but with the regional                                                               
name attached.                                                                                                                  
                                                                                                                                
MR. ELDER said the geographic difference is identified in those                                                                 
cases.                                                                                                                          
                                                                                                                                
SENATOR DONLEY moved to pass CSSB 93(L&C) with accompanying fiscal                                                              
notes and individual recommendations.  There were no objections and                                                             
it was so ordered.